How to Set Up a Business in Bangladesh: A Practical Guide

A step-by-step guide to establishing a company in Bangladesh — registration, BIDA approval, economic zone allocation, the One-Stop Service, and the approvals that actually cause delays.

Dhaka — where most company formation and regulatory business is conducted. Photo: Zubuyer Kaolin, via Wikimedia Commons (CC BY 2.0)

By the UISC BD Editorial Desk · United Information Service Center · Published 9 September 2026 · 8-minute read

This guide covers the sequence for establishing a business in Bangladesh, and — more usefully — flags which steps actually determine your timeline. It is orientation, not legal advice; engage Bangladeshi counsel before committing capital.

Step 1: Decide Your Structure First

Structure determines everything downstream, so settle it before filing anything. The three broad routes are covered in detail in our guide to investment routes:

Wholly foreign-owned company — permitted in most sectors, gives full control.
Joint venture with a Bangladeshi partner — local regulatory familiarity, labour relations knowledge and distribution, at the cost of shared control.
Branch or liaison office — suitable for representation and market testing, not manufacturing.

Check sector-specific restrictions at this stage. A small number of sectors carry ownership limits, and discovering one after incorporation is expensive.

Step 2: Name Clearance and Incorporation

Companies are registered with the Registrar of Joint Stock Companies and Firms (RJSC). The sequence is name clearance, then submission of the Memorandum and Articles of Association with shareholder and director details, then payment of registration fees and issue of the incorporation certificate.

A private limited company is the standard vehicle for foreign investment.

Step 3: Register With BIDA

Foreign investors register their project with the Bangladesh Investment Development Authority. This registration is what unlocks the investor-facing benefits — work permit recommendations for expatriate staff, remittance approvals, and access to the incentive framework.

Do not treat this as a formality to complete later. BIDA registration is the gateway to most of what makes the investment work financially.

Step 4: Choose Your Location Deliberately

For manufacturers, this is the single most consequential decision after structure.

Inside an economic zone you get tax holidays of five to ten years, duty exemption on machinery and raw materials, and serviced infrastructure. The main options are the National Special Economic Zone at Mirsarai and the zones being developed across the southern region.

Outside a zone, you retain the 50 percent income tax exemption on export earnings if you export more than 80 percent of output — that benefit applies regardless of location — but you forgo zone infrastructure and must arrange utilities yourself.

Step 5: The Three Approvals That Set Your Timeline

Most delay concentrates in three permissions, all now available through BIDA's One-Stop Service platform:

Environmental clearance — required before construction. Historically the longest pole; category depends on your industry's environmental impact classification.
Power connection — the item most underestimated by new entrants. Get a written commitment with a date. Industrial-voltage supply is the binding constraint on most projects, and an unconnected factory is a very expensive idle asset.
Import permits — required for machinery and raw materials, and directly tied to your duty exemption entitlement.

Step 6: Banking, Tax and Compliance Registrations

Open a bank account and route inbound capital through formal banking channels — this is what establishes your right to repatriate profits later.
Obtain a Taxpayer Identification Number (TIN) and VAT registration.
Secure a trade licence from the relevant city corporation or local authority.
For exporters and importers, obtain an Export Registration Certificate (ERC) or Import Registration Certificate (IRC).

The banking step deserves emphasis. Repatriation rights are unrestricted in principle, but they depend on capital having entered through documented formal channels. Informal inbound transfers create problems that surface years later at exactly the wrong moment.

Step 7: Employment and Work Permits

Bangladeshi labour law governs hiring, working hours, termination and workplace conditions. Expatriate employees require work permits, for which BIDA registration provides the recommendation pathway.

Budget realistically for training. In established sectors like garments the skilled workforce exists; in emerging sectors like electronics, specialised technicians are scarce and training is a capital line item.

Realistic Timelines

Company incorporation is measured in weeks. BIDA registration adds further weeks. Environmental clearance, zone allocation and power connection are the variables that stretch a project from months into longer — which is precisely why the OSS platform targeted those three.

Plan on a manufacturing project taking meaningfully longer than incorporation alone suggests, and structure your capital deployment so equipment does not arrive before the building is ready to receive it.

Five Mistakes Worth Avoiding

Assuming power will be available. Confirm the connection date in writing before finalising the site.
Bringing capital informally. It compromises repatriation rights.
Choosing a zone by acreage rather than readiness. Announced zones and serviced zones are different things — verify which is which.
Skipping local legal review of sector rules. Ownership restrictions are narrow but real.
Underestimating the supplier ecosystem gap. In newer sectors, components and specialist services may need importing.

Where to Start

BIDA's official portal — investbangladesh.gov.bd — is the authoritative source for current procedures, and its FAQ covers investment, visa, tax and setup questions directly. Verify every figure and timeline in this guide against it before acting, as procedures and incentive schedules are amended in national budgets.

Sources

"BIDA FAQ: Answers to Investment, Visa, Tax & Business Setup Queries," Bangladesh Investment Development Authority — investbangladesh.gov.bd
"Understanding Investment Laws in Bangladesh: Legal Guide (2026)," Justice Corner — justicecornerbd.com
"Bangladesh Economic Zones For Foreign Investors: Legal Guide (2026)," TRW Law Firm — tahmidurrahman.com
"Bangladesh Economic Zones Guide," LegalSeba — legalseba.com

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